Senate Foreign Affairs, Defence and Trade Legislation Committee, , 2:18:11 to 2:34:09
Questions are raised regarding the transition of a high-ranking official to Lockheed Martin and the decision-making process for helicopter replacements.
Topics: Procurement, Integrity, Public service staffing
Speakers: David Shoebridge, Chris Deeble AO CSC, Speaker 17, Admiral David Johnston AC RAN, John Reid PSM, Hon Michaelia Cash, Raff Ciccone
now Senator Schub, I'll start off with
you. >> Um, you have the call. >> Thanks. Thanks, Chair. And um I've got some questions um that start at the joint aviation systems division. And um who's best to answer these?
Senator, what nature of questions might help answer your question? Well, we
might start by saying the what's the role of the joint aviation systems division within um CASG or currently.
>> Morning, Senator Chris Deel, deputy secretary of capability acquisition and sustainment group. [clears throat] Joint aviation systems um has responsibility for rotary wing capability for army and for navy. We got two
Does the microphone work? >> It might be working but I think all of us are having trouble hearing it. The hub up in the room. >> Sorry m. >> Yeah. So what what is the role of the joint aviation systems division within Kasg.
>> A joint aviation systems division within Kasg is responsible for rotary wing capability for army and navy. They also support um training systems including pilot training uh for defense at large and they have other capability ancillary capabilities supporting aviation systems within defense
>> and by ro within the army we're talking largely about the helicopters
>> um within army it would be um the helicopter fleet and also within navy
>> until recently who was the head of the joint aviation systems division
Major General Jeremy King was the head of joint aviation systems division.
>> And when did he cease in that way?
>> Jeremy left the service at the end of last year. I think chief of army uh can um describe more specifically his departure. >> He ceased working in Kasg at the end of
>> Ceased working in Kaz for the joint aviation systems. when? At the end of last year, 31 December or
>> um I'd have to go and check that specific date. I don't know where the chief of army has any specifics.
>> It's okay. We It doesn't have to hold.
>> Senator, I don't have the specific date, but we can certainly get that for you.
>> Well, the end of last year, the his contact details are still on the defense website. So, if I went on to defense and I'd have a look, his contact details are still on defense website. It must be very recently that he left. You worked with him for decades, Lieutenant General Stewart. You must remember when he left
Uh so Major General King ceased military service in service category 7 which is full-time service and transferred to reserve service category 3 on the 5th of January 2026.
Um, what role did the joint aviation system or sorry, when was Major General King when when did his work start with the Joint Aviation Systems Division?
>> Um, Senator, I'd have to take that on notice more specifically. [clears throat] Um, my understanding is he would have had at least two to three years in that role.
>> Yeah. And before that, he was in Army aviation, was he?
>> I believe I would need to check. Sorry.
Lieutenant Chief of Army.
>> Before that, he worked in army headquarters.
>> Army headquarters. Yep. >> Now, um in the last two to three years, there's been a lot of activity um particularly involving army aviation. Um there was the decision to scrap the Taipans and to bury the Taipans. What role did Major General King have in that decision to scrap the Taipans and to bury the Taipans?
[clears throat] >> Major General King would have been informing the decisions based on um the sustainment of that capability into the broader defense >> um and chief of army in particular.
>> Yep. Now, um, in 2023, there was a decision to replace the Taipans with, um, 40 Blackhawks that are made by Lockade Martin. I think that's a $2.8 billion purchase contract. Who is that
>> I believe I would need [clears throat] to check, but I think that's in the
order. Major King was involved obviously
>> Sorry, Senator, it might be helpful. So, Major General King, then Brigadier King was employed as the director general platforms in army headquarters uh which um look was mainly um focused on vehicle [clears throat] programs >> on which >> vehicle programs. So the government's previous government's decision on >> the acquisition of the Blackhawk helicopters um then Brigadier King uh didn't have a part in army aviation planning or decisions at at that point. Uh certainly in his employment as a head of um aviation systems in KZG uh he um was responsible for the the execution of those decisions.
>> All right. The execution of the contract the $2.8 billion contract to buy 40 Blackhawks from Loheed Martin. He was involved in the execution of that. >> Yes. >> Yes. Um, [clears throat] it's my recollection that Major General King, I recall in inter in informal interactions I had with defense, um, was critical in responding to some of the issues around the Taipans. um his knowledge was critical for responding to some of the issues and the decision to um um to remove the Taipans from service. He was critical in that or played an important role in that decision-making, didn't he? Lieutenant
General Senator Maj King's advice as a subject matter expert was uh was absolutely um part [clears throat] of the decision making. He was not a
Um now he left defense on the 5th of January having gone from joint aviation systems division the head of that which was oversighting the Loheed Martin contract um and army aviation um we're now in early February barely a month after where does Major General King now work
>> Major General King works for Lock Kate
Martin. >> Yes. Um, how is it that you don't even have a month calling off between being the head of the joint aviation systems division, managing the Loheed Martin contract, the part of defense that is making these critical decisions um about platforms including Loheed Martin's Blackhawks. How is it that there's not even a month cooling off between moving from working for defense to working to the world's biggest arms manufacturer in an area directly related to where you are in defense? How do you not even have a month off? Is that consistent with conflict of interest policies? Is that consistent
Senator Shoebridge, I can speak to your [clears throat] question about conflict of interest and from both a defense perspective uh and from a uh I can't speak on behalf of Dr. Martin but um the policies relevant policies in regard to both perceived or actual conflict of interest have been followed here. Well, actually,
I don't even think it was a month off because in January, last month, Loheed Martin made their announcement. In fact, here it is, 12th of January, wasn't even a week. He goes from the center the head of a key part of defense making managing the Loheed Martin contract making decisions about acquisitions including Loheed Martin um products and not even a week he steps out of that into working for Loheed Martin the world's biggest arms manufacturer and a huge client of defense are you saying there's no policy in defense that would prevent that that this was lawful Is that your position, Lieutenant
General? >> Senator, what I what I uh just offered to you was that the the policy as it pertains to conflict of interest have
been followed. Is there no cooling off period? Admiral Johnson, you're the chief of defense. Isn't there at least a cooling off period so people don't go from immediately applying all of the knowledge they had inside defense to working for a defense contractor particularly a defense contractor who was intimately connected with their work in defense is there no calling off
period senator there are clear policies on conflict of interest management uh in now retired major [clears throat] general king circumstances retired >> there are obligations on him uh as part of this process Defense also sought undertakings from Loheed Martin to assure ourselves that they would comply with the conflicts of interest requirements particularly around the roles that major general king had previously performed and asurances were [clears throat] achieved or received from defense around the management of those conflict of interest areas.
>> What were the asurances and were they given in writing and if so will you provide them to the committee?
that that asurances from the company were provided to us. I'm not sure of the circumstances. Others might have the detail on that element of a senator.
>> Were they in writing?
>> Senator John Reed, deputy secretary governance. Um, if I can just take back a step. Yes, asurances have been provided in writing. You asked a question about the policy and how this fits within the policy. There is consistent with the APS-C guidance policy in the department around this. It requires that prior to acceptance of any post separation employment, the individual is required to notify defense. Um, Major General King did that. Prior to the acceptance of any offer, he is required to an individual is required to fill in a conflict of interest uh form. He did that. Um, that was reviewed by Mr. Deble as his manager. Um he submitted a second conflict of interest form once he had been offered the role um by Loheed Martin which went into detail about the arrangements that Loheed Martin were proposing to put in place and the things that Major General King was proposing to
put into place in place. Well, you see, whatever the asurances are, [cough] this is what very recently former Major General King said in the press release from Loheed Martin. I'm eager to leverage my extensive program leadership experience and commitment to customer success in leading Loheed Martin's efforts in Australia and New Zealand. He was being absolutely clear about this. He was going to leverage what he knew, his contacts, his defense career with barely a week off to maximize the profits for Lockade Martin, the world's biggest arms manufacturer. Did anyone have to sign off on this?
>> So, Senator, um, under the provisions in the defense policy, both conflicts of interest were reviewed by Mr. Deble as Deputy Secretary Cass. um and were submitted through through my team through the through the integrity team uh including the undertakings that were were made in writing by Loheed Martin.
>> Sorry. Submitted through to the integrity team. Did anyone have to sign off on this? Literally going from gamekeeper to poacher in less than a week. Did anybody have to sign off on this? Did you approve it, Mr. Devil?
>> Senator, I reviewed the conflict of interest. I also reviewed the agreement with Loheed Martin with respect to U major general retired Jeremy King recusing himself from any of the projects that he um had been under his management in the past. at the point that he um notified me in the October time frame of last year that he was potentially being considered by Loheed Martin, I assured that he put a conflict of interest in that occurred in the early November time frame that that ensured he was not engaged in any contractual activity related to Loheed Martin through the remaining period of time and any of the projects that he had a role to play um as the head of joint aerospace systems. um he is recused from for 12 months.
>> CDF, when members of the public look at this and they see someone who's been the head of a key capability, in this case the joint aviation systems division responsible for making decisions about multi-billion dollar contracts with Loheed Martin, managing multi-billion dollar contracts with Loheed Martin. and they see someone step out of that from the uniform and in less than a week take a job with Lockheed Martin, [cough and clears throat] that doesn't just miss the pub test. That brings defense into disrepute into disrepute, the the public service into disrepute because they see people leveraging their very recent experience to maximize corporate profits in this case for the world's biggest weapons manufacturer. Don't you see how this looks to the public and see how it stinks in the eyes of the public? This kind of behavior,
>> Senator, there are very clear conflict of interest processes that manage where those conflicts may occur. They were followed on this occasion. Major Major General King retired. He is uh has extensive experience brought over his career, not just the latter part of it, but which moving to defense industry and allowing an individual of that caliber to continue to contribute to our nation is to our benefit.
>> Contribute to our nation. He's contributing to Loheed Martin, a foreign defense contractor and the world's biggest arms manufacturer.
>> The time that you have is now we'll have to move on. Um, now we'll move on to Senator Cash.
>> Uh, Senator Henderson, we'll kick off
here. >> Henderson. All right, Senator Henderson.